If your small business is growing and the times come for a dedicated human resources role, it is essential to have an organized human resource department that can look after payroll, compliance, recruiting, benefit administration, and tracking vacation days.
Below is a guideline on organizing your human resource department for your small business. As your business grows, so will your need for proper HR, especially when needs arise, such as:
- Hitting an unexpected and lengthy growth period
- Facing complicated compliance issues
- Lacking necessary processes and systems
HR Timeline Based on Number of Employees
The need for human resources in business will vary depending on each company. A good time to bring in an HR employee is when you need to deal with compliance, benefits, and payroll taxes.
Optimizing Your HR Structure
Typically, companies will bring in their own HR employees when they have hit 100 plus employees in their business, before that milestone, there are companies such as PEO’s that can offer human resource support to smaller businesses.
Divide Human Resource by Functions
As your business human resource department is growing, you will need specialists for specific human resource functions, including benefits and employee relations. These tasks become more complicated and complex as the size of your employees grows. Here is how human resource tasks would be divided up:
- HR director – handles the strategic vision of the department and approves high-level decisions.
- Recruiting manager – works with the hiring managers to create job listings, goes through resumes, conducts interviews, and informs of job offers.
- Employee relations manager – handles the needs of onboarding employees, coordinates performance management, manages employee disputes, and recommends policy changes for approval.
- Compensation manager – develops compensation structures and competitive pays with predetermined budgets, manages the core human resource software systems, error-free payroll runs, and benefits administration.
- Training manager – works closely with the department managers to develop useful training courses that enhance employees’ skills, create, and build materials and assessments and manage learning platforms.
- Compliance manager – ensures that the business is up-to-date with their health and safety regulations while managing certifications for employees.
This structure for the human resource department helps ensure that the core and strategic human resources needs have a designated owner and allows for the HR Director to be in the know on all the aspects, discussions, and projects in the human resource department.
Items to Keep in Mind
Under the human resource structure with the managers, you may have numerous assistants or specialists. Here are some best practices to keep in mind as your business grows your human resource department.
- It can be tempting to take employees you have and fit them in other departments to meet your needs, but if someone is not a good fit for the role, you should not force them.
- Invest in human resource software early. Human resource programs can be used for start-ups. There are a variety of affordable options. These software solutions help your business automate tasks such as tracking clock-ins and running payroll.
Consider a PEO Company
There are companies called professional employer organizations (PEO) that help small businesses with their human resources tasks. Along with performing human resource duties, PEOs can assist with obtaining health insurance, benefits, and 401 (k) plans for your employees.
Although services offered can vary depending on the PEO companies, the basics most professional employer organizations provide functions such as:
- Benefits administration
- Performance management
- Employee training
- Payroll processing and tax filing
- Recruiting
- Compliance and risk management
- Onboarding and offboarding
- Time and attendance
- Workers compensation
- Employee handbooks
Using a PEO service to outsource your employee service and human resource needs can provide many advantages to your business, especially if you are over your head and need resources to accommodate your employers adequately. Visit quick sprout for tips on the best PEO companies.
Final Thoughts
As your business grows, it is essential to develop a strong HR department and meticulously organize and strategize jobs. Through having specialized managers overlooking specific HR jobs, you are guaranteeing your business and employees are correctly being looked after. Again, typically companies with 100 plus employees will begin to hire in-house for their human resource department. If you are a start-up, small or medium-sized business, consider using the services of a PEO company. A professional employer organization can be an excellent source for your company, with specialists at hand to help you with human resource administration, benefits for employees, and to guarantee your payroll and taxes are in compliance with state and federal rules and regulations.
